I need IP addresses for reputation

Number one of seven in our occasional series on why ESPs need, or don’t need, lots of IP addresses to send mail properly.

I need at least one IP address per customer, to handle IP based reputation

Why this is right
While DKIM is gradually moving the main key for reputation tracking to a domain based token, right now the main key that is used to track reputation is the sending IP address.
If you have multiple customers sending mail of different quality using a different sending IP address for each of those customers means that the good customers will not be penalized by the poor behaviour of the bad customers. And, just as importantly, poor customers will not benefit from the behaviour of the good customers. This allows receivers to track sender reputation more accurately, and so delivery just wanted email to their recipients better. That makes everyone happy (other than the bad customers who deserve to be unhappy until they fix their practices).
Why this is wrong
Reputation is tied to sending IP address, but it’s also affected by volume of emails received from that IP address, and the consistency of volume. If a customer is only sending a few hundred emails a week to any given receiver ISP or they’re only mailing monthly then they won’t be able to maintain much of a positive reputation, simply because they’re too small to keep track of or because they mail so infrequently that each time they mail the receiving ISP will have forgotten about their previous mailings. In those cases the sender will be treated much the same as a new sender from a given IP address (neutral, at best, maybe poorly). For those cases a customer is likely to get better delivery rates if their mail is sent through an IP address pool that sends enough email overall to be noticed and tracked by receiving ISPs.
Another reason this is wrong
Reputation is tied to sending IP address, but receiving ISPs aren’t stupid and do recognize attempts to game the system. If you’re an ESP with a mix of good and bad customers then segregating the IP addresses they send from will not completely isolate the reputation of those customers from each other. The bad customers will drag your reputation as an ESP down more than the good customers will pull it up. And as your reputation as an ESP degrades it will pull down the reputation of your good customers much more than it will increase the reputation of your bad or unknown customers.
So segregating senders onto their own IP addresses doesn’t entirely separate their reputation from each other or from their ESP. And if you believe it does, you’re likely to make business decisions based on that misunderstanding that will badly affect your reputation and the delivery rates of your customers. Don’t fall into that trap.

Godzilla sneaks up on Tokyo
Godzilla sneaks up on Tokyo

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In one case, a client had a spammer slip onto their system. As a result the client was added to the SBL. The client disconnected the customer, got their IP delisted from the SBL and all was good until the spammer managed to sweet talk the new abuse rep into turning his account back on. Predictably, he started spamming again and the SBL relisted the IP.
My client contacted me and asked me to intercede with Spamhaus. I received a detailed analysis of what happened, how it happened and how they were addressing the issue to prevent it happening in the future. I relayed the info to Spamhaus, the block was lifted and things are all back to normal.
Contrast that with another client dealing with widespread blocking due to a reputation problem. Their approach was to ask the blocking entity which clients they needed to disconnect in order to fix the problem. When the blocking entity responded, the customer disconnected the clients and considered the issue closed. They didn’t look at the underlying issues that caused the reputation problems, nor did they look at how they could prevent this in the future. They didn’t evaluate the customers they disconnected to identify where their processes failed.
The first client took responsibility for their problems, looked at the issues and resolved things without relying on Spamhaus to tell them how to fix things. Even though they had a problem, and is statistically going to have the occasional problem in the future, this interaction was very positive for them. Their reputation with the Spamhaus volunteers is improved because of their actions.
The second client didn’t do any of that. And the people they were dealing with at the blocking entity know it. Their reputation with the people behind the blocking entity was not improved by their actions.
These two clients are quite representative of what I’ve seen over the years. Some senders see blocking as a sign that somehow, somewhere there is a flaw in their process and a sign they need to figure out how to fix it. Others see blocking as an inconvenience. Their only involvement is finding out the minimum they need to do to get unblocked, doing it and then returning to business as usual. Unsurprisingly, the first type of client has a much better delivery rate than the second.

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The ESP was talking about assigning a couple of dozen IP addresses to each customer, because they might be useful for spreading load and it would provide some flexibility for moving from one IP address to another if one should get blocked. And IP addresses are pretty much free. They were wrong.
The ISP was considering an application for 750 IP addresses from a new ESP customer. They assumed that there was no possible reason other than snowshoe spam for an email related customer to need that many IP addresses. While I suspect they may have been right about the specific potential customer, the general assumption was wrong.
I’ve seen a lot of reasons given by ESPs for why they need so many IP addresses:

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